Trade from China and Southeast Asia to North America and Europe is expected to boom during the next five years, according to a new study released by business analyst company IHS Inc. China’s trade will continue to increase by more than five percent annually between 2015 and 2020, according to the World Trade Service of IHS Maritime & Trade forecasts. This positive medium-term trade growth comes despite recent setbacks caused by China’s marked economic slowdown and weaker growth among other emerging markets in the current and near-term. “These increases will not be the double-digit rises seen before the 2008 global economic crisis,” says Krispen Atkinson, principal analyst at IHS Maritime & Trade. “However, an increase of more than 30 percent in the next five years underscores China’s intent to remain a new trade hub-and-spoke linchpin for the rest of the economic world, cementing the Maritime Silk Road Initiative via China and Asia within the emerging market universe.”
One new trend is the move toward larger containerships to streamline the supply chain. The four alliances that dominate east-west trade are pushing the trend toward containerships capable of carrying 20,000 boxes (20 foot equivalent units) in their quest to reduce unit costs with ever more efficient vessels. Current containerships hold around 13,000 boxes, so the new super-containers are capable of transporting about 50 percent more cargo. Their push has made further capacity available in the trade.
“China may be the major powerhouse in the region, but Southeast Asia is making significant headway,” Atkinson says. Vietnam’s exports are estimated to increase by 44 percent by 2020. IHS forecasts a 44-percent increase in trade between Vietnam and North America, and a 43-percent increase in trade between Vietnam and Europe in the next five years. “In terms of actual cargo, the figures are low when compared with China, but are still huge jumps for these economies,” Atkinson says. Trade between these two regions is made up of manufactured goods, such as home appliances and mechanical hardware. “Vietnam, India, and many South Asian economies stand to benefit from recent energy and commodity price falls as net importers of these goods,” notes Jan Randolph, director of sovereign risk analysis at IHS. “They have significant industries and service sectors of their own that benefit from cheaper inputs. They also have currencies that are not coupled to a strengthening U.S. dollar.”
IHS expects trade routes from China to Africa will see a marked increase over the next five years, with the highest growth expected from the East Africa-to-China route, incorporating Malawi, Mozambique, Zambia, and Zimbabwe. “Trade between East Africa and China is expected to increase by 91 percent by 2020, centered around manufactured goods,” Atkinson says. “East Africa is becoming a new hub for the Chinese.” Chinese leadership has publicly announced its commitment to develop infrastructure, and to promote regional integration in East Africa. “In the coming years, China’s relationship with East Africa will change,” notes Natznet Tesfay, head of Sub-Saharan Africa analysis at IHS Country Risk. “Right now, the focus is on importing raw materials and exporting manufactured goods. But, Chinese investments in enhancing regional interconnectivity will enable it to take advantage of comparatively lower operational costs, and to onshore manufacturing activity in East Africa.”
Source: http://www.inboundlogistics.com/cms/article/global-logistics-september-2015/#china
